EXHIBIT 10.2
AGREEMENT
DATED AS OF AUGUST 20, 1997
BY AND AMONG
USA WASTE SERVICES, INC.
USA WASTE OF FAIRLESS HILLS, INC.
CLEANSOILS OF FAIRLESS HILLS, INC.
EESI OF FAIRLESS HILLS, INC.
AND
EASTERN ENVIRONMENTAL SERVICES, INC.
Table of Contents
Page
RECITALS............................................................. 1
ARTICLE I DEFINITIONS................................................ 2
ARTICLE II ASSET TRANSFER; CLOSING................................... 5
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLERS................ 11
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF PURCHASERS.............. 19
ARTICLE V ADDITIONAL AGREEMENTS OF SELLERS........................... 20
ARTICLE VI ADDITIONAL AGREEMENTS OF PURCHASERS....................... 24
ARTICLE VII CONDITIONS OF PURCHASERS................................. 25
ARTICLE VIII CONDITIONS OF SELLERS................................... 26
ARTICLE IX INDEMNIFICATION........................................... 27
ARTICLE X OTHER PROVISIONS........................................... 30
SCHEDULES
1.19 Equipment
1.25 Operating Agreement
1.30 Soil Plant
2.7(e) Assignment of CleanSoils Operating Agreement
2.8(a) Xxxx of Sale
2.9 Allocation of Purchase Price
3.3 Material Documents
3.10 Insurance Policies, Performance Bonds and Letters of Credit
3.12(a) Violations of Federal, State or Local Law
3.12(d) Notices of Violations
3.12(f) Violations of Governmental Approvals
3.19 List and Synopsis of All Litigation
5.5 Form of Lease Agreement and Utility Agreements Assignment
AGREEMENT
This Agreement is dated as of this August 20, 1997 ("Agreement").
BY AND AMONG
USA Waste Services, Inc. ("USA Waste"), a corporation duly organized and
existing under the laws of the State of Delaware, having a principal office at
First City Tower, 0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000;
USA Waste of Fairless Hills, Inc. ("USA Fairless"), a corporation duly
organized and existing under the laws of the State of Delaware, having a
principal place of business at 0000 Xxxxx 00xx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000;
CleanSoils of Fairless Hills, Inc. ("CleanSoils Fairless"), a corporation
duly organized and existing under the laws of the State of Delaware, having a
principal place of business at 0000 Xxxxx 00xx Xxxxxx, Xxxxxxxxxxxx,
Xxxxxxxxxxxx 00000;
EESI of Fairless Hills, Inc. ("EESI Fairless"), a corporation duly
organized and existing under the laws of the State of Delaware, having a
principal place of business at 0000 Xxxxxxxx Xxxxx, Xxxxx Xxxxxx, Xxx Xxxxxx
00000; and
Eastern Environmental Services, Inc. ("EESI"), a corporation duly organized
and existing under the laws of the State of Delaware, having a principal place
of business at 0000 Xxxxxxxx Xxxxx, Xxxxx Xxxxxx, Xxx Xxxxxx 00000.
RECITALS
--------
CleanSoils Fairless and USA Fairless own certain assets, government
approvals, leases and permits which are used and necessary for the operation of
a soil remediation facility and business located at 00 Xxxxx Xxxx, Xxxxx
Xxxxxxxx, Xxxxx Xxxxxx, Xxxxxxxxxxxx ("Soil Remediation Business"). EESI
Fairless is a corporation which is wholly owned by EESI. USA Fairless and
CleanSoils Fairless are corporations which are wholly owned by USA Waste. The
parties have entered into this Agreement in order to evidence a transaction
under which EESI Fairless will acquire all of the stock of CleanSoils Fairless
and USA Fairless.
Soil Remediation of Philadelphia, Inc. ("SRP"), a Delaware corporation,
CleanSoils Fairless and Eastern Waste of Delaware Valley, Inc. ("Eastern
Waste"), a Delaware corporation entered into a Management Agreement dated July
__, 1997 (the "Management Agreement"), pursuant to which Eastern Waste shall,
among other things, provide administrative, management, consulting, financial,
marketing and operational support services to SRP and CleanSoils Fairless.
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ARTICLE I
DEFINITIONS
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The following capitalized terms when used in this Agreement have the
meanings set forth in this Article I (such meanings to be applicable equally
both to the singular and plural terms defined).
Section 1.1 Agreement. Agreement means this Agreement dated as of
---------
August 20, 1997.
Section 1.2 CleanSoils. Cleansoils means CleanSoils, Inc., a
----------
corporation duly organized and existing under the laws of the State of Delaware,
having a principal place of business at 0000 Xxxx Xxxxxx Xxxx X, Xxxxxxxxx,
Xxxxxxxxx 00000.
Section 1.3 CleanSoils Fairless. CleanSoils Fairless means CleanSoils
-------------------
of Fairless Hills, Inc., a corporation duly organized and existing under the
laws of the State of Delaware, having a principal place of business at 00 Xxxxx
Xxxx, Xxxxx Xxxxxxxx, Xxxxx Xxxxxx, Xxxxxxxxxxxx.
Section 1.4 CleanSoils Agreement. CleanSoils Agreement means the
--------------------
Purchase Agreement dated as of June 30, 1994, entered into between USA Waste,
USA Xxxxxxxx, Xxxxx X. Xxxxxxx, CleanSoils, CleanSoils Fairless and CSE, Inc.
Section 1.5 Intentionally Omitted.
Section 1.6 Intentionally Omitted.
Section 1.7 Closing. Closing shall mean the acts, conveyances,
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transfers and payments to occur, pursuant to this Agreement on the Closing Date.
Section 1.8 Closing Date. Closing Date shall mean the date on which the
------------
Closing is to occur pursuant to this Agreement.
Section 1.9(a) Companies. Companies means CleanSoils Fairless, USA
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Fairless, and USA Waste.
(b) Contamination. Contamination means the uncontained
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presence of Hazardous Substances on, under or emanating from the Leased
Premises, which may require clean-up under any Environmental Law or other
applicable law.
Section 1.10 Customer Contracts. Customer Contracts shall mean the
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written and/or oral agreements under which the Soil Plant has performed work or
services for customers.
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Section 1.11 Covenant Not To Compete Agreement. Covenant Not To Compete
---------------------------------
Agreement means the Covenant Not To Compete Agreement to be executed between
Sellers and Purchasers at the Closing.
Section 1.12 DEP. DEP means the Commonwealth of Pennsylvania Department
---
of Environmental Protection.
Section 1.13 DEP Permits. DEP Permits means the Permit for Solid Waste
-----------
Disposal and/or Processing Facility, No. 301242, issued to CleanSoils on October
29, 1993, as such permit was transferred to USA Fairless, and to any successor
permitees, and other operating permits issued by DEP to USA Fairless or
CleanSoils with regard to the Soil Plant including, but not limited to, any
permits to operate the Soil Plant and which allow air emissions, such as the
Plan Approval issued by DEP to CleanSoils for the construction of a thermal soil
remediation plant in accordance with Application No. 00-000-000.
Section 1.14 Earn-Out Payment. Earn-Out Payment means the payment to be
----------------
paid to CleanSoils pursuant to the provisions of Article III of the CleanSoils
Agreement.
Section 1.15 EESI. EESI means Eastern Environmental Services, Inc., a
----
corporation duly organized and existing under the laws of the State of Delaware
having a principal place of business at 0000 Xxxxxxxx Xxxxx, Xxxxx Xxxxxx, Xxx
Xxxxxx 00000.
Section 1.16 EESI Fairless. EESI Fairless means EESI of Fairless Hills,
-------------
Inc., a corporation duly organized and existing under the laws of the State of
Delaware having a principal place of business at 0000 Xxxxxxxx Xxxxx, Xxxxx
Xxxxxx, Xxx Xxxxxx 00000.
Section 1.17 Environmental Laws. Environmental Laws means all laws,
------------------
statutes, ordinances or acts of the United States of America, the Commonwealth
of Pennsylvania, Falls Township, Bucks County, or any political subdivision
thereof, that relate to the condition of the air, ground or surface water, land
or other parts of the environment, to the Contamination or potential
Contamination of any substance or radiation into the air, ground or surface
water, land or other parts of the environment, or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or other
handling of substances that might pollute, contaminate or be hazardous or toxic,
if present in the air, ground or surface water, land, or other parts of the
environment.
Section 1.18 Environmental Lien. Environmental Lien means a lien that
------------------
arises pursuant to any Environmental Law.
Section 1.19 Equipment. Equipment shall mean the items of machinery and
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personal property owned by USA Fairless at Closing, including, without
limitation, the Soil Plant, the improvements to the Leased Premises, all
furniture and office equipment on the Leased Premises, and the rolling stock and
equipment listed on Schedule 1.19 attached to this Agreement.
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Section 1.20 Governmental Approvals. Governmental Approvals means the
----------------------
DEP Permits and all other permits, licenses, development agreements or other
governmental permissions needed or required to legally construct and/or operate
the Soil Plant, including, without limitation, a developer agreement entered
into between Falls Township, Bucks County, Pennsylvania and CleanSoils.
Section 1.21 Hazardous Substances. Hazardous Substances means and
--------------------
includes any hazardous, toxic or dangerous waste, substance, contaminant or
material defined as such in (or deemed as such for purposes of) the
Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.
(S)9601 et seq., any other so-called "Superfund" or "Superlien" law, or any
-- ---
other applicable law or other requirement of any governmental authority
regulating, relating to or imposing liability or standards of or for conduct
concerning any hazardous, toxic or dangerous waste, substance, contaminant or
material, as now or hereafter in effect, including, without limitation, any oil,
petroleum or waste oil as defined in any of the Environmental Laws.
Section 1.22 Lease Agreement. Lease Agreement means the Commercial
---------------
Building Lease dated June 1, 1994, by and between USX Corporation, a Delaware
corporation, as landlord, and CleanSoils as tenant. The Lease Agreement was
assigned to CleanSoils Fairless on June 30, 1994.
Section 1.23 Leased Premises. Leased Premises means the real property
---------------
and improvements leased under the Lease Agreement from USX Corporation.
Section 1.24 OENJ Agreement. OENJ Agreement means the Agreement for
---------------
Acceptance of Recyclable Material for Beneficial Reuse as Fill executed by USA
Fairless and OENJ Corporation on, respectively, February 5, 1996, and January
22, 1996.
Section 1.25 [Intentionally deleted]
Section 1.26 Person. Person means any individual or entity, whether
------
private or governmental.
Section 1.27 Purchasers. Purchasers means EESI and EESI Fairless.
----------
Section 1.28 Receivables. Receivables means the amounts owed to USA
-----------
Fairless under the Customer Contracts or otherwise for the remediation or
disposal of soil in connection with the Soil Remediation Business.
Section 1.29(a) Sellers. Sellers means USA Waste, CleanSoils Fairless and
-------
USA Fairless.
(b) Shares. Shares means all of the issued and outstanding
------
capital stock of USA Fairless and CleanSoil Fairless.
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Section 1.30 Soil Plant. Soil Plant means the thermal soil remediation
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plant located on the Leased Premises and constructed in accordance with the DEP
Permits, as further described on Schedule 1.30 attached hereto.
Section 1.31(a) Soil Remediation Business. Soil Remediation Business means
-------------------------
the business and operation conducted from the Leased Premises utilizing the DEP
Permits, the Governmental Approvals, the Contracts, the Utility Agreements and
the Equipment.
(b) Subsidiary. Subsidiary means each of USA Fairless and
----------
CleanSoils Fairless.
Section 1.32 USA Fairless. USA Fairless means USA Waste of Fairless
------------
Hills, Inc., a Delaware corporation, wholly owned by USA Waste, having a place
of business at 0000 Xxxxx 00xx Xxxxxx, Xxxxxxxxxxxx, XX 00000.
Section 1.33 USA Waste. USA Waste means USA Waste Services, Inc., a
---------
Delaware corporation having its principal place of business at First City Tower,
0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000.
Section 1.34 Utility Agreements. Utility Agreements mean the Services
------------------
Agreement dated January 1, 1994, entered into between USX Corporation and
CleanSoils; the Electric Service Agreement dated January 1, 1994, entered into
between USX Corporation and CleanSoils; and the Natural Gas Sales and Purchase
Agreement dated January 1, 1994, entered into between USX Corporation and
CleanSoils. The Utility Agreements were assigned to CleanSoils Fairless on June
30, 1994.
ARTICLE II
ASSET TRANSFER; CLOSING
-----------------------
Section 2.1 Place for Closing. Subject to Section 2.6 hereof, closing
-----------------
under this Agreement shall take place at the offices of EESI, 1000 Xxxxxxxx
Place, Mount Laurel, New Jersey, or such other place as the parties hereto may
agree upon. The date that Closing occurs is referred to hereinafter as the
"Closing Date" and the act of closing as "Closing."
Section 2.2 Agreement to Transfer Assets; Consideration.
-------------------------------------------
(a) Upon the terms and subject to the conditions set forth in this
Agreement, on the Closing Date: (i) USA Waste shall transfer to EESI Fairless
all of the outstanding stock of CleanSoils Fairless and USA Fairless; and (ii)
EESI shall deliver to USA Waste Thirty Five Thousand (35,000) shares of the
common stock of EESI, which shares shall not be registered under the Securities
Act of 1933 (the "Act") or any state securities law ("EESI Stock").
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(b) At the Closing, USA Waste shall deliver to Purchaser stock
certificates evidencing all the outstanding and issued stock in USA Fairless
("USA Fairless Stock") and CleanSoils Fairless ("CleanSoils Fairless Stock") and
(ii) effective resignations of the directors and officers of USA Fairless ("USA
Fairless Resignations") and CleanSoils Fairless ("CleanSoils Fairless
Resignations"). The USA Fairless Stock and CleanSoils Fairless Stock shall be
endorsed for transfer to EESI Fairless and shall be conveyed free and clear of
any liens, security interest, option, right of another or other encumbrance or
claim ("Encumbrance").
(c) [Intentionally deleted]
(d) The OENJ Agreement provides that USA Fairless has prepaid for the
disposal of 300,000 cubic yards of Recyclable Materials, as defined in the OENJ
Agreement. Sellers represent and warrant to EESI, as of August 20, 1997, that
USA Fairless has the right under the OENJ Agreement to dispose of 126,666 cubic
yards of Recyclable Materials at the OENJ Property, as defined in the OENJ
Agreement. At Closing, Sellers shall deliver to EESI a certificate stating the
amount of Recyclable Materials that USA Fairless then has the right under the
OENJ Agreement to dispose of (the "Closing Amount").
Section 2.3. [Intentionally deleted]
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Section 2.4 Term And Time For Closing. Following execution of this
-------------------------
Agreement, the Purchasers and USA Waste shall be obligated to conclude the
transaction strictly in accordance with its terms within five business days of
the time that the conditions of Closing set forth in Article VII and Article
VIII have been satisfied or waived. If the failure to conclude this transaction
is due to the refusal and failure of a party or parties to perform its or their
obligations to close under this Agreement, the other party or parties may seek
to enforce this Agreement with an action of specific performance, in addition
to, and not in limitation of, any other rights and remedies available to such
parties under this Agreement, or at law or in equity, including, without
limitation, an action to recover actual damages resulting from the default of
such other parties.
This Agreement and the transactions contemplated hereby may be terminated
at any time prior to the Closing Date:
(a) by mutual written agreement of EESI and the USA Waste;
(b) by the USA Waste, or by EESI, in the event Purchasers or USA Waste, as
applicable, makes a material misrepresentation under this Agreement or breaches
a material covenant or agreement under this Agreement, and fails to cure such
misrepresentation or breach within ten (10) days from the date of written notice
of the existence of such misrepresentation or breach;
(c) by the USA Waste or EESI, if the Closing shall not have occurred by
_______, 1997, or such other date as may be agreed to by the parties hereto in
writing, due to the non-fulfillment
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of a condition precedent to such party's obligation to close as set forth at
Article VII or VIII hereof, as applicable (through no fault or breach by the
terminating party).
All terminations shall be exercised by sending the other parties a written
notice of the termination. In the event this Agreement is terminated as
provided herein, this Agreement shall become void and be of no further force and
effect and no party hereto shall have any further liability to any other party
hereto, except that this Section 2.6, Article IX, Section 10.1, Section 10.2 and
Section 10.16 shall survive and continue in full force and effect,
notwithstanding termination. The termination of this Agreement shall not limit,
waive or prejudice the remedies available to the parties, at law or in equity,
for a breach of this Agreement.
Section 2.5. Deliveries by Purchasers. At the Closing, Purchasers
------------------------
shall deliver, all duly and properly executed, authorized and issued (where
applicable):
(a) The EESI Stock, as provided in Section 2.2 above;
(b) A certified copy of resolutions of the directors of Purchasers
authorizing the execution and delivery of this Agreement and each other
agreement to be executed in connection herewith (collectively, the "Collateral
Documents") and the consummation of the transactions contemplated herein and
therein;
(c) The Certificate described at Section 8.1;
(d) Other documents and instruments required by this Agreement, if any.
Section 2.6. Deliveries by USA Waste. At the Closing, USA Waste shall
-----------------------
deliver to Purchasers, all duly executed, the following:
(a) Certificates for all of the shares of stock of each of USA Fairless
and CleanSoils (collectively, the Stock) free and clear of any Encumbrance;
(b) A certified copy of resolutions of the directors of USA Waste
authorizing the execution and delivery of this Agreement and each of the
Collateral Documents.
(c) Other documents and instruments required by this Agreement, if any.
Section 2.7. Sales Tax. Purchasers shall pay all motor vehicle and
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other transfer or sales taxes and fees imposed on the conveyance of the Assets
by all governments, state, local and federal.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE USA WASTE
-----------------------------------------------
With knowledge that Purchasers are relying upon the representations,
warranties and covenants herein contained, USA Waste represents and warrants to
Purchasers and make the following covenants for Purchasers' benefit. USA Waste
represents and warrants that the representations and warranties contained in
this Article III are true on the date hereof and shall be true on the Closing
Date.
Certain of the following representations and warranties are made "to USA
Waste's knowledge" or "to USA Waste's or other Subsidiary actual knowledge."
When so used, these phrases shall mean USA Waste's actual knowledge together
with that knowledge which any officer of USA Waste or other Subsidiary would
have acquired had they exercised reasonable diligence in the conduct of such USA
Waste's or other Subsidiary's business affairs.
Section 3.1 Organization and Standing. Subsidiaries are corporations
-------------------------
duly organized, legally existing and in good standing under the laws of the
state of their incorporation and in the Commonwealth of Pennsylvania, with full
power and authority to own their properties and conduct their business as now
being conducted. USA Fairless and CleanSoils Fairless own no stock or interest
in any other corporation, partnership, or other business organization.
Section 3.2 Issued Stock.
------------
(a) All of the authorized, issued, and outstanding shares of capital
stock and other securities of USA Fairless and CleanSoils Fairless are owned by
USA Waste, including without limitation equity securities, debt securities and
options free and clear of any Encumbrance;
(b) USA Waste is the only owner of the securities of USA Fairless and
CleanSoils Fairless;
(c) the common stock of USA Fairless and CleanSoils Fairless owned by USA
Waste is legally and validly authorized and issued, fully paid and nonassessable
and free and clear of all liens, claims and encumbrances of every kind and
nature and is not subject to any agreement or instrument relating to the
transfer, disposition or voting of such securities;
(d) there is no outstanding right of any kind to acquire additional shares
of any class from USA Fairless or CleanSoils Fairless nor has any person claimed
any such rights; and
(e) all of the outstanding shares of CleanSoils Fairless and USA Fairless
have been duly authorized, issued, and are fully and validly paid and non-
assessable.
Section 3.3 Contracts, Permits and Material Documents. Listed on
-----------------------------------------
Schedule 3.3 are all of the following documents and items to which USA Fairless
and CleanSoils Fairless are a party or which pertain or effect the Soil
Remediation Business: (i) leases for real and personal property,
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(ii) permits, licenses, consents and other approvals from governments,
governmental agencies (federal, state and local) and/or third parties relating
to, used in or required for the operation of the Soil Remediation Businesses,
(iii) franchises, (iv) promissory notes, guarantees, bond, mortgages, liens,
pledges, and security agreements under which the USA Fairless or CleanSoils
Fairless is bound or under which the USA Fairless or CleanSoils Fairless is a
beneficiary, (v) collective bargaining agreements, (vi) patents, trademarks,
trade names, copyrights, trade secrets, proprietary rights, symbols, service
marks, and logos, and (vii) other contracts, agreements and instruments not
listed on another Schedule attached to this Agreement which are binding on USA
Fairless or CleanSoils Fairless or any of its property or pursuant to which the
USA Fairless or CleanSoils Fairless derives any material benefit or has imposed
upon it any material detriment. For purposes of this Section 3.3, a material
benefit or material detriment shall be anything which provides a benefit or
imposes a detriment having a value of $20,000 or more. The Material Documents
listed on Schedule 3.3 are organized under subheadings for each of the different
type of documents listed. Neither the USA Fairless nor CleanSoils Fairless nor,
to the Companies knowledge, any person or party to the any of the Material
Documents or bound thereby is in material or knowing default under any of the
Material Documents, and no act or event has occurred which with notice or lapse
of time, or both, would constitute such a default. Neither USA Fairless or
CleanSoils Fairless is a party to, and their property is not bound by, any
agreement or instrument which is material to the continued conduct of its
business operations as now being conducted or with respect to which a default
might materially and adversely affect its properties, business operations, or
financial condition of USA Fairless or CleanSoils Fairless, except as listed in
Schedule 3.3. The documents listed on Schedule 3.3 confer on USA Fairless or
CleanSoils Fairless all rights necessary to enable USA Fairless or CleanSoils
Fairless to conduct their operations as now being conducted.
Section 3.4 Personal Property. The Equipment is in operable condition,
------------------
except for normal wear and tear or may be made operable without undue expense.
Each Subsidiary has good and marketable title to the assets. All of its assets
and properties are owned by each of the Sellers free and clear of any mortgage,
pledge, lien, encumbrance, charge, claim, security agreement, agreement
regarding or restricting transfer or title retention or other security
arrangement, except the items set forth in Section 3.3(iv).
Section 3.5. The Leased Property. USA Fairless and CleanSoils Fairless
-------------------
have never owned, leased or otherwise occupied, had an interest in or operated
any real property other than the Leased Property. The Lease Agreement, the
Utility Agreements and the CleanSoils Operating Agreement are in full force and
effect, are not amended either orally or in writing and their is no existing
event which would create a default under such agreements by the passage of time.
There are no mechanics' liens affecting the Leased Property. There are no levied
or pending special assessments affecting all or any part of the Leased Property
owed to any governmental entity and none is threatened.
Section 3.6 Customers. USA Fairless is not, and to the knowledge of the
---------
Companies, no other person or party to any contract USA Fairless has with its
customers (both oral and
-9-
written) is in default and, to the knowledge of the Companies, no act or event
has occurred which with notice or lapse of time, or both, would constitute such
a default.
Section 3.7 Liabilities and Receivables Reflected on Financial
--------------------------------------------------
Statements.
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(a) USA Fairless and CleanSoils do not have any liabilities, fixed or
contingent, other than:
(i) liabilities fully reflected in the Balance Sheet, except for
liabilities not required to be disclosed therein in accordance with generally
accepted accounting principles and
(ii) current bills not yet due or payable in accordance with their
normal terms arising since the date of the Balance Sheet and arising during the
normal course of business consistent with past custom and practice, including
utility services, including gas, electric, water or sewer.
(b) All Receivables have been generated in the ordinary course of business
of the Companies'. To Companies knowledge, there are no defenses or set-offs to
any of the Receivables.
(c) All intercompany receivables and payables among USA Waste, USA
Fairless and CleanSoils Fairless, and any of their affiliated entities whether
reflected on the Balance Sheet or not, have been fully omitted and discharged.
Section 3.8 Fiscal Condition of USA Fairless and CleanSoils Fairless.
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USA Waste and USA Fairless and CleanSoils Fairless have delivered to Purchasers
the unaudited Balance Sheets of USA Fairless and CleanSoils Fairless as of June
30, 1997, prepared on the accrual basis, in accordance with generally accepted
accounting principles ("Balance Sheets"). The Balance Sheets to the best of
Companies' knowledge are true and correct and fairly reflect the books and
records of USA Fairless and CleanSoils Fairless as of June 30, 1997. Except as
set forth on the Balance Sheets, there has not been:
(a) Any disposition by USA Fairless or CleanSoils Fairless of any of their
capital stock or any grant of any option or right to acquire any of their
capital stock, or any declaration or payment of any dividend or other
distribution with respect to their capital stock;
(b) Any sale or other disposition of any asset owned by the USA Fairless
or CleanSoils Fairless at the close of business on the date of the Balance
Sheet, or acquired by it since that date, other than in the ordinary course of
business consistent with past practice;
(c) Any expenditure or commitment by the CleanSoils Fairless or USA
Fairless for the acquisition of any single asset or any single business, except
in the ordinary course of business consistent with past practices;
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(d) Any damage, destruction or loss (whether or not insured) adversely
affecting the property, business or prospects of the USA Fairless or CleanSoils
Fairless, except damage, destruction or loss which does not exceed Fifty
Thousand Dollars ($50,000) in the aggregate;
(e) Any material bonuses or increases in the compensation payable or to
become payable by the USA Fairless or CleanSoils Fairless to any officer or key
employee, except in the ordinary course of business;
(f) Any loans or advances to USA Fairless or CleanSoils Fairless other
than renewals or extensions of existing indebtedness in the ordinary course of
business consistent with past practice; or
(g) Any change in accounting method or practice.
Section 3.9 Tax Returns. USA Fairless and CleanSoils Fairless have
-----------
filed all Federal and other tax returns for all periods on or before the due
date of such return (as may have been extended by any valid extension of time)
and have paid all taxes due for the periods covered by the said returns. USA
Fairless and CleanSoils Fairless are Subchapter "C" corporation under the
Internal Revenue Code of 1986, as amended (the "Code"). USA Fairless and
CleanSoils Fairless have filed, and will file (if due), in a timely manner all
requisite federal, state, local and other tax returns due for all fiscal periods
ended on or before the date hereof, and as of the Closing shall have filed in a
timely manner all such returns due for all periods ended on or before the
Closing Date and all periods after the Closing Date to the date that the USA
Fairless Stock and CleanSoils Stock are delivered by Escrow Agent to EESI
Fairless, as set forth in Section 2.2(b) of this Agreement.
Section 3.10 Policies of Insurance. All insurance policies, performance
---------------------
bonds, and letters of credit insuring the USA Fairless or CleanSoils Fairless or
which the USA Fairless or CleanSoils Fairless has had issued and which have not
expired are listed on Schedule 3.10 hereto. Schedule 3.10 includes the names
and addresses of the insurers and sureties, policy and bond numbers, types of
coverage or bond, time periods or projects covered and the names and addresses
of all known issuing banks, beneficiaries, agents or agencies with respect to
each listed insurance policy, performance bond and letter of credit. USA
Fairless' and CleanSoils Fairless' current insurance policies, performance bonds
and letters of credits are still in force and effect and the premiums thereon
are not delinquent. Neither USA Fairless or CleanSoils Fairless have received
notification from any insurance carrier denying or disputing any claim made by
USA Fairless or CleanSoils Fairless or denying or disputing any coverage for any
such claim or denying or disputing the amount of any claim. Neither USA
Fairless or CleanSoils Fairless have any claim against any of their insurance
carriers under any policies insuring them pending or anticipated and there has
been no occurrence of any kind which would give rise to any such claim.
Section 3.11 Employees, Pensions and, ERISA.
------------------------------
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(a) USA Fairless and CleanSoils Fairless do not have any contract of
employment with an officer or other employee that is not terminable without
penalty on notice of two weeks or less.
(b) No employee of USA Fairless and CleanSoils Fairless is represented by
any union. There is no pending or threatened dispute between USA Fairless and
CleanSoils Fairless and any of their employees which might materially and
adversely affect the continuance of any business operations.
(c) There are no employee benefit plans, funds or programs (within the
meaning of the Code or the Employee Retirement Income Security Act of 1974, as
amended ("ERISA")) which are currently maintained and/or were established or
sponsored by USA Fairless and CleanSoils Fairless (whether or not they are now
terminated) or to which USA Fairless and CleanSoils Fairless currently
contributes, or has an obligation to contribute in the future, including,
without limitation, employment agreements and any other agreements containing
"golden parachute" provisions ("Plans"), whether or not the Plans are or are
intended to be (i) covered or qualified under the Code, ERISA or any other
applicable law, (ii) written or oral, (iii) funded or unfunded, or (iv)
generally available to all employees of the USA Fairless or CleanSoils Fairless.
(d) USA Fairless and CleanSoils Fairless have no obligations with respect
to, and make no contributions to, any Multi-Employer Pension Plan.
Section 3.12 Legality of Operation. With respect to USA Fairless and
---------------------
CleanSoils Fairless:
(a) Except as listed in Schedule 3.12(a) hereto, USA Fairless and
CleanSoils Fairless have operated from the inception of USA Fairless and
CleanSoils Fairless and will continue to operate to the Closing Date in
compliance with all Federal, state and local laws, rules, pronouncements and
regulations, including, without limitation all Environmental Laws; land use
laws; federal, state and local permits; orders; franchises and consents;
payroll, employment, and labor laws; and anti-trust, fair competition and safety
laws ("Laws"), as applicable to USA Fairless and CleanSoils Fairless and their
property and operations. Other than the CleanSoils Lawsuit, there are no claims,
actions, suits or proceedings pending, or threatened against or affecting USA
Fairless and CleanSoils Fairless, at law or in equity, or before or by any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, wherever located, which would result in any
adverse change of $15,000 or greater in the financial condition or business of
USA Fairless and CleanSoils Fairless or which would question the validity or
propriety of this Agreement or of any action taken or to be in accordance with
or in connection with this Agreement.
(b) Except as listed in Schedule 3.12(a) hereto, USA Fairless and
CleanSoils Fairless have not transported, stored, treated or disposed, nor to
its knowledge, have they allowed third persons to transport, store, treat or
dispose waste to or at (i) any location other than a site lawfully permitted to
receive such waste for such purpose or, (ii) any location currently designated
for
-12-
remedial action pursuant to the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), or any similar federal or state
statute; nor have USA Fairless and CleanSoils Fairless performed or arranged for
or, to its knowledge, allowed by any method or procedure such transportation or
disposal in contravention of state or federal laws and regulations or in any
other manner which may result in liability for contamination of the environment.
USA Fairless and CleanSoils Fairless have not disposed, nor have they knowingly
allowed third parties to dispose of waste upon property owned or leased by USA
Fairless and CleanSoils Fairless other than as permitted by, and in conformity
with, applicable Law. USA Fairless and CleanSoils Fairless have not received
notification of any present or past failure (which has not been remedied) by USA
Fairless and CleanSoils Fairless to comply with any law, permits, franchises,
licenses or orders applicable to them or their assets, except as listed on
Schedule 3.12(a). Without limiting the generality of the foregoing, USA Fairless
and CleanSoils Fairless have not received any notification (including requests
for information directed to USA Fairless and CleanSoils Fairless or an owner
thereof) from any governmental agency asserting that the business is or may be a
"potentially responsible person" for a remedial action at a waste storage,
treatment or disposal facility, pursuant to the provisions of CERCLA, or any
similar federal or state statute assigning responsibility for the costs of
investigating or remediating releases of contaminants into the environment.
Other than petroleum contaminated soils received for remediation in the ordinary
course of their business, neither USA Fairless or CleanSoils Fairless has
received hazardous waste as defined in the Resource Conservation and Recovery
Act, 42 USCA Section 6901 et seq., or in any similar federal or state statute.
-- ---
(c) USA Fairless and CleanSoils Fairless have obtained and maintained,
when required to do so under applicable Laws, trip tickets, signed by the
applicable waste generators demonstrating the nature of all waste deposited and
or transported by USA Fairless and CleanSoils Fairless. No employee, contractor
or agent of USA Fairless and CleanSoils Fairless has, in the course and scope of
employment with the USA Fairless and CleanSoils Fairless, been harmed by
exposure to hazardous materials, as defined under the Laws. No liens with
respect to environmental liability have been imposed against USA Fairless and
CleanSoils Fairless under CERCLA, any comparable Pennsylvania statute or other
applicable Law, and no facts or circumstances exist which would give rise to the
same.
(d) Attached hereto as Schedule 3.12(d) is a list of all Notice of
Violations issued to USA Fairless and CleanSoils Fairless by any federal, state
or local regulatory agency. There are no notices of violation either from a
federal, state or local authority received by USA Fairless and CleanSoils
Fairless, except as listed in Schedule 3.12(d).
(e) USA Fairless and CleanSoils Fairless are not under investigation by
any District Attorney or similar state or local official or the Justice
Department of the United States of America for the violation of any Laws,
including, without limitation, racketeering, unfair competition, or anti-trust.
No facts or circumstances exist which would cause the USA Fairless and
CleanSoils Fairless to be liable for the violation of any Laws, including,
without limitation, racketeering, unfair competition, or anti-trust.
-13-
(f) Except as set forth in Schedule 3.12(f), all licenses, approvals,
permits and certificates ("Government Authorizations") needed or required for
the operation of the Soil Remediation Business have been obtained by Purchasers
and are set forth on Schedule 3.3 hereof. All such Government Approvals are in
full force and effect, and except as set forth in Schedule 3.12(f), USA Fairless
and CleanSoils Fairless are in compliance with all such Government Approvals,
and all such Government Approvals have been validly and legally obtained by USA
Fairless and CleanSoils Fairless.
Section 3.13. Corrupt Practices. To the Companies' knowledge, USA
-----------------
Fairless and CleanSoils Fairless have not made, offered or agreed to offer
anything of value to any employees of any customers of USA Fairless and
CleanSoils Fairless for the purpose of attracting business to USA Fairless and
CleanSoils Fairless or any foreign or domestic governmental official, political
party or candidate for government office or any of their respective employees or
representatives, nor have USA Fairless and CleanSoils Fairless otherwise taken
any action which would cause them to be in violation of the Foreign Corrupt
Practices Act of 1977, as amended.
Section 3.14 Legal Compliance. The USA Waste has the right, power, legal
----------------
capacity and authority to enter into, and perform its obligations under this
Agreement, and no approvals or consents of any other persons are necessary in
connection with the transactions contemplated by this Agreement. The execution,
delivery and performance of this Agreement will not result in a breach of or
constitute a default or result in the loss of any material right or benefit
under:
(a) Any charter, by-law, agreement or other document to which USA Fairless
and CleanSoils Fairless is a party or by which USA Fairless and CleanSoils
Fairless or any of their property is bound; or
(b) Any decree, order or rule of any court of governmental authority which
is binding on USA Fairless and CleanSoils Fairless or on the property of USA
Fairless and CleanSoils Fairless.
Section 3.15 Transaction Intermediaries. No agent or broker or other
--------------------------
person acting pursuant to the authority of the Companies is entitled to any
commission or finder's fee in connection with the transactions contemplated by
this Agreement.
Section 3.16 Intellectual Property. USA Fairless and CleanSoils Fairless
---------------------
have not infringed and are not now infringing, on any trade name, trademark,
service xxxx, copyright, trade secret or patent belonging to any person, firm or
corporation ("Intellectual Property").
Section 3.17 Disclosure. Neither the representations and warranties of
----------
USA Waste contained in this Agreement nor any information contained in any
Schedule or other document delivered by the Companies to the Purchasers contains
any untrue statement of a material fact, or, omits to state any statement of a
material fact necessary to make the statements contained therein or herein not
misleading. If Purchasers elect to Close the transaction knowing that a
representation or warranty of the Companies is not true or is not correct
("False Representation
-14-
and Warranty"), Purchasers shall not be entitled to indemnification under
Article IX of this Agreement with respect to the part of the False
Representation or Warranty which Purchasers knew to be not true or not correct
at the Closing.
Section 3.18 Continuation of Legal Status. No written agreement between
----------------------------
USA Fairless and CleanSoils Fairless and any third party shall be impaired or in
any way limited by the transactions contemplated by this Agreement.
Section 3.19 Litigation. All pending or, to the Companies' knowledge,
----------
threatened litigation, administrative or judicial proceedings or investigations
by any governmental agency or officials involving USA Fairless and CleanSoils
Fairless or its assets, liabilities or the Company Shares, together with a
description of each such proceeding, are set forth on Schedule 3.19 attached.
There is no pending or, to the Companies' knowledge, threatened litigation,
administrative or judicial proceeding or investigation involving USA Fairless or
CleanSoils Fairless or their assets, liabilities or the USA Fairless or
CleanSoils Fairless Shares, except as listed on Schedule 3.19.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASERS
--------------------------------------------
Purchasers represent and warrant to USA Waste that the representations and
warranties contained in this Article IV are true on the date hereof and shall be
true on the Closing Date.
Section 4.1 Structure. The Purchasers are corporations duly organized
---------
and legally existing in good standing under the laws of their state of
incorporation and are qualified to do business in Pennsylvania.
Section 4.2 Authorization to Proceed with this Agreement. Purchasers
--------------------------------------------
have by proper corporate proceedings duly authorized the execution, delivery and
performance of this Agreement and each other agreement contemplated to be
entered into (collectively, the "Collateral Documents") and no other corporate
action is required by law or the Certificate of Incorporation or by-laws of
Purchasers.
Section 4.3 Absence of Intermediaries. No agent, broker, or other
-------------------------
person acting pursuant to Purchasers' authority will be entitled to make any
claim against USA Waste for any commission or finder's fee in connection with
the transactions contemplated by this Agreement.
Section 4.4 EESI Stock. All of the shares of EESI stock to be issued
----------
to USA Waste as contemplated by this Agreement and the Collateral Documents
will, upon delivery, be duly authorized and validly issued, fully paid and non-
assessable and issued in compliance with federal and state securities laws, free
and clear of all liens, charges, restrictions, mortgages, security interests or
claims of any kind.
-15-
Section 4.5 Authorization. The Purchasers have the power and authority
-------------
to enter into this Agreement and each of the Collateral Documents and to carry
out the transactions contemplated hereby and thereby and this Agreement and each
of the Collateral Documents to which the Purchasers are a party, constitutes the
legal, valid and binding obligation of the Purchasers, enforceable in accordance
with its terms. The Purchasers have the power and authority to own and lease its
properties and to carry on its respective businesses as now conducted.
Section 4.6 Contravention; Consents and Approvals. No filing, action,
-------------------------------------
consent or approval of any person, entity or governmental body is required by
the Purchasers for the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby. The execution and delivery
of this Agreement by the Purchasers and the consummation of the transactions
contemplated hereby by the Purchasers will not result in a breach of the terms
or conditions of, or constitute a default under, or violate, (a) any provision
of any law, regulation or ordinance, (b) any agreement, lease, mortgage or other
instrument or undertaking, oral or written, to which the Purchasers are a party
or by which any of their properties or assets are or may be bound or affected,
or (c) any judgment, order, writ, injunction or decree of any court,
administrative agency or governmental body.
Section 4.7 Commission Filings. Purchasers have delivered to USA Waste
------------------
current (for the quarter ending December 31, 1996) and all historical filings
made by EESI on Forms 8-K, 10-K and 10-Q timely filed with the Securities and
Exchange Commission ("SEC") on and after June 30, 1996 (the "Public Reports").
The Public Reports accurately and completely describe, in all material respects,
Purchaser's financial status, business operations and prospects as of the date
of such filings and as of the date of such reports, and do not omit any material
fact(s) necessary to make the information contained in the filings not
misleading.
Section 4.8 Accuracy of Representations. The representations and
---------------------------
warranties of the Purchasers contained in this Agreement do not contain any
untrue statement of a material fact, or, omit to state any statement of a
material fact necessary to make the statements contained therein or herein not
misleading. If USA Waste elects to Close the transaction knowing that a
representation or warranty of the Purchasers is not true or not correct
("Purchaser False Representation and Warranty"), USA Waste shall not be entitled
to indemnification under Article IX of this Agreement with respect to the part
of the Purchaser False Representation or Warranty which the Companies know to be
not true or not correct at the Closing.
-16-
ARTICLE V
ADDITIONAL AGREEMENTS OF USA WASTE
----------------------------------
The Sellers covenant and agree with Purchasers as follows:
Section 5.1 Payment of Expenses. USA Waste will pay all expenses
-------------------
(including legal fees) incurred by the Companies in connection with the
negotiation, execution and performance of this Agreement.
Section 5.2 Access to Records. The Companies will give to Purchasers
-----------------
and their representatives, experts and advisors, from and after the date of
execution of this Agreement and up until Closing, full access to all of the
properties (including the Leased Property), assets, books, contracts, documents,
records, contracts and customer lists of USA Fairless and CleanSoils Fairless,
and to make available to Purchasers and their representatives, experts and
advisors all additional financial statements of and all information with respect
to the business and affairs of USA Fairless and CleanSoils Fairless that
Purchasers may reasonably request. Purchasers and their representatives shall
have the right to copy any information or documentation the Purchasers are
entitled to inspect under this Section 5.2.
Section 5.3 [Intentionally deleted]
Section 5.4 Continuation of Insurance. The Companies will keep in
-------------------------
existence all policies of insurance insuring USA Fairless and CleanSoils
Fairless against liability and property damage, fire and other casualty through
the time of Closing.
Section 5.5 Prohibited Activities to Closing. Between the date of this
--------------------------------
Agreement and the closing date USA Waste will cause USA Fairless and CleanSoils
Fairless to not, without the prior written consent of EESI Fairless:
(a) amend the Articles of Incorporation or Bylaws of USA Fairless and
CleanSoils Fairless;
(b) change the authorized capital of USA Fairless and CleanSoils Fairless
or the equity ownership of USA Fairless and CleanSoils Fairless or grant any
options, warrants, puts, calls, conversion rights or commitments relating to the
equity interests of USA Fairless and CleanSoils Fairless;
(c) declare or pay any dividend of USA Fairless and CleanSoils Fairless in
shares of stock of USA Fairless and CleanSoils Fairless;
(d) enter into any contract or commitment or incur or agree to incur any
liability or make any capital expenditures in excess of an aggregate of One
Hundred Dollars ($100.00);
-17-
(e) enter into any employment agreement with any employee or to enter into
any other type of agreement which is not terminable, without any penalty or
payment, at the option of USA Fairless or CleanSoils Fairless;
(f) create, assume or permit to exist any mortgage, pledge or other lien
or encumbrance upon any assets or properties whether now owned or hereafter
acquired;
(g) sell, assign, lease or otherwise transfer or dispose of any property
or equipment;
(h) negotiate to acquire any business or begin any new business or
project;
(i) merge or consolidate or agree to merge or consolidate with or into any
other corporation;
(j) waive any of its material rights or claims;
(k) breach or permit a breach of, amend or terminate, any material
agreement, or any permit, license or other agreement or right to which USA
Fairless and CleanSoils Fairless is a party; provided, however, that Purchasers
-------- -------
have been advised that no air permit has been issued to Sellers;
(l) enter into any other transaction or incur any obligation;
(m) allow any other action or omission, or series of actions or omissions,
by USA Fairless and CleanSoils Fairless that would cause a representation and
warranty of USA Fairless and CleanSoils Fairless made in Article III of this
Agreement to be untrue on the date that the USA Fairless Stock and CleanSoils
Fairless Stock is delivered by Escrow Agent to EESI Fairless; or
(n) amend, modify, or otherwise change any of the DEP Permits or other
Governmental Approvals.
Section 5.6 Intercompany Receivables. USA Waste covenants and agrees
------------------------
that it will not seek to collect any accounts receivable in respect of any
intercompany advances made prior to the closing from either of USA Fairless and
CleanSoils Fairless.
Section 5.7 Restrictions on Transfer of Unregistered Stock. The EESI
----------------------------------------------
Stock to be delivered to USA Waste will not be registered under the Securities
Act of 1933 (the "Act"). USA Wastes understands and agrees that the following
restrictions and limitations are applicable to the purchase and resale or other
transfer of the EESI Stock, pursuant to the Act:
(a) USA Waste agrees that the EESI Stock shall not be sold or otherwise
transferred, unless the EESI Stock is registered under the Act and state
securities laws or is exempt therefrom.
-18-
(b) Until the EESI Stock is registered under the Act, a legend in
substantially the following form will be placed on the certificates evidencing
the EESI Stock to be issued to USA Waste:
"The securities represented by this certificate have not been registered
under the Securities Act of 1933 or any state securities act. These shares
have been acquired for investment and may not be sold, transferred, pledged
or hypothecated unless (i) they shall have been registered under the
Securities Act of 1933 and any applicable states securities act or (ii)
Eastern Environmental Services, Inc., shall have been furnished with an
opinion of counsel, reasonably satisfactory to counsel for Eastern
Environmental Services, Inc., that registration is not required under any
such acts."
(c) Stop transfer instructions will be imposed with respect to the EESI
Stock issued to Seller pursuant to this Agreement so as to restrict resale or
other transfer thereof except in accordance with the foregoing provisions of
this Agreement.
Section 5.8 Representations as to Private Offering. The EESI Stock is
--------------------------------------
being delivered to the USA Waste in a private placement under Section 4(2) of
the Act and under Regulation D promulgated under the Act. To induce Purchasers
to issue the EESI Stock, USA Waste represents and warrants as follows:
(a) that it is a Delaware Corporation with its principal place of business
located in Texas and is an "Accredited Investor," as that term is defined in
Regulation D under the Act.
(b) that they have received a copy of the Public Reports.
(c) that the EESI Stock is being acquired for its own account without a
view to public distribution or resale and that USA Waste its has no contract,
undertaking, agreement or arrangement to sell or otherwise transfer or dispose
of EESI Stock, or any portion thereof, to any other person.
(d) that, in determining to acquire the EESI Stock, it has relied solely
upon its independent investigation, including the advice of its legal counsel
and accountants or other financial advisers or purchaser representatives, and
has, during the course of discussions concerning its acquisition of the EESI
Stock, been offered the opportunity to ask such questions and inspect such
documents concerning Purchasers and their business and affairs has requested so
as to more fully understand the nature of the investment and to verify the
accuracy of the information supplied.
(e) USA WASTE ACKNOWLEDGES THAT THE ACQUISITION OF THE EESI STOCK INVOLVES
A HIGH DEGREE OF RISK, and represent and warrant that it can bear the economic
risk of the acquisition of the EESI Stock, including the total loss of its
investment.
-19-
(f) that (i) it has adequate means of providing for its current needs and
financial contingencies, (ii) it has no need for liquidity in this investment,
(iii) it has no debts or other obligations, and cannot reasonably foresee any
other circumstances, that are likely in the future to require it to dispose of
the EESI Stock, and (iv) all of its investments in and commitments to non-liquid
investments are, and after its acquisition of the EESI Stock will be, reasonable
in relation to its net worth and current needs.
(g) that no federal or state agency has approved or disapproved the EESI
Stock or made any finding or determination as to the fairness of the EESI Stock
for investment.
(h) that the EESI Stock is being offered and sold in reliance on specific
exemptions from the registration requirements of federal and state securities
laws and that Purchasers are relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and understandings set
forth herein in order to determine the applicability of such exemption and the
suitability of USA Waste to acquire the EESI Stock.
ARTICLE VI
ADDITIONAL AGREEMENTS OF PURCHASERS
-----------------------------------
Section 6.1 Payment of Expenses. Purchasers will pay all expenses
-------------------
(including legal fees) incurred by them in connection with the negotiation,
execution and performance of this Agreement.
Section 6.2 Books and Records. From the Closing Date to six years after
-----------------
the Closing Date, the Purchasers shall allow the USA Waste and its professional
advisers access to all business records and files of the Company pertaining to
the operation of the Soil Remediation Business prior to the Closing Date which
were delivered to the Purchasers in accordance with this Agreement ("Records")
where the USA Waste requires access to the Records for the purpose of preparing
its tax returns, responding to any audit or informational request regarding its
tax returns or if required by its for use in a judicial proceeding in which its
are a party. Access to the records shall be during normal working hours at the
location where such Records are stored. The USA Waste shall have the right, at
its own expense, to make copies of any Records provided, however, that any such
access or copying shall be had or done in such a manner so as not to interfere
unreasonably with the normal conduct of the Purchasers' business.
Section 6.3 Required Name Change. Not later than ninety (90) days
--------------------
following the closing date Purchasers shall take all actions required to change
the names of USA Fairless and CleanSoils Fairless to names not containing the
terms "USA" or "CleanSoils."
Section 6.4 Collection of Receivables. Purchasers covenant and agree
-------------------------
that they will not seek to collect any accounts receivable in respect of
intercompany advances prior to the closing from USA Waste and any of its
affiliated entities.
-20-
ARTICLE VII
CONDITIONS OF PURCHASERS
The obligations of Purchasers to effect the transaction contemplated by
this Agreement shall be subject to the fulfillment at or prior to the time of
Closing of each of the following items which are conditions to the Closing:
Section 7.1 Compliance by Companies. The Companies shall have performed
-----------------------
and complied with all of the obligations and conditions required by this
Agreement to be performed or complied with by the Companies at or prior to the
Closing Date. All representations and warranties of Companies contained in this
Agreement shall be true and correct at and as of the Closing Date, with the same
force and effect as though made at and as of the Closing Date, except for
changes expressly permitted by this Agreement.
Section 7.2 Litigation Affecting This Transaction. There shall be no
-------------------------------------
actual or threatened action by or before any court which seeks to restrain,
prohibit or invalidate the transaction contemplated by this Agreement or which
might affect the right of EESI Fairless to own, operate in its entirety or
control any of the Assets or which, as a result of the transaction contemplated
by this Agreement, might affect such right as to any Purchaser or any affiliate
thereof subsequent to the Closing Date and which, in the judgment of the Board
of Directors of EESI, made in good faith and based upon advice of its counsel,
makes it inadvisable to proceed with the transaction contemplated by this
Agreement.
Section 7.3 Governmental and Contractual Approvals. Purchaser and the
--------------------------------------
Companies will have advised the Pennsylvania Department of Environmental
Protection ("DEP") of the EESI Fairless becoming the owner of the Assets and the
operator of the Soil Plant under the terms of the Operation Agreement and the
DEP shall not have objected to the transactions as set forth in this Agreement;
all necessary consents to the transaction shall have been obtained by Purchases
including the consents, if any under the Lease Agreement and the Utility
Agreements. If USX Corporation refuses to give any required consent to the
transactions under the Lease Agreement or the Utility Agreements and USA Waste
Services, Inc. indemnifies the Purchasers against any loss or damages to
Purchasers arising from failure to obtain the consents, the condition of closing
relating to obtaining the consents shall be waived by the Purchasers.
Section 7.4 CleanSoils Litigation. All necessary documents relating to
---------------------
the settlement of litigation between CleanSoils and the Companies shall have
been executed so that neither Purchasers nor either of the Subsidiaries shall
have any liability in respect of such litigation and so that such litigation
shall not in any way impair, encumber, or give rise to any claim against the
Shares.
Section 7.5 Release and Indemnity. Either (i) USX Corporation shall
---------------------
have modified the terms of the Lease Agreement to provide that all claims
arising under Environmental Laws relating to any condition on the Leased
Premises prior to the date of the Lease Agreement or
-21-
migrating onto the Leased Premises from the real property USX Corporation owns
which surrounds the Leased Premises shall not be the responsibility of all past
and future tenants under the Lease Agreement; or (ii) USA Waste shall have
agreed to indemnify and hold harmless EESI Fairless Hills and EESI, and their
respective directors, officers, and stockholders from and against any and all
claims arising under Environmental Laws relating to any condition existing on
the real property occupied or owned by CleanSoils Fairless or USA Fairless prior
to the date of the Lease Agreement.
ARTICLE VIII
CONDITIONS OF USA WASTE
-----------------------
The obligations of USA Waste to transfer the Shares in accordance with this
Agreement shall be subject to the fulfillment at or prior to the time of Closing
of each of the following conditions:
Section 8.1 Compliance by Purchasers. The Purchasers shall have
------------------------
performed and complied with all of the obligations and conditions required by
this Agreement to be performed or complied with by them at or prior to or at the
Closing Date. All representations and warranties of Purchasers contained in this
Agreement shall be true and correct at and as of the Closing Date, with the same
force and effect as though made at and as of the Closing Date, except for
changes expressly permitted by this Agreement.
Section 8.2 Litigation Affecting This Transaction. There shall be no
-------------------------------------
actual or threatened action by or before any court which seeks to restrain,
prohibit or invalidate the transaction contemplated by this Agreement, which in
the judgment of the Seller, made in good faith and based upon advice of its
counsel, makes it inadvisable to proceed with the transaction contemplated by
this Agreement.
Section 8.3 Governmental Approvals. Purchaser and the Companies will
----------------------
have advised the Pennsylvania Department of Environmental Protection ("DEP") of
the EESI Fairless becoming the owner of the Stock and the operator of the Soil
Plant under the terms of the Operation Agreement and the DEP shall not have
objected to the transactions as set forth in this Agreement.
ARTICLE IX
INDEMNIFICATION
---------------
Section 9.1 Indemnification by USA Waste. USA Waste agrees that it
----------------------------
will, indemnify, defend, protect and hold harmless the Purchasers and their
officers, shareholders, directors, divisions, subdivisions, affiliates,
subsidiaries, parent, agents, employees, legal representatives, successors and
assigns from and against all claims, damages, actions, suits, proceedings,
demands, assessments, adjustments, penalties, costs and expenses whatsoever
(including specifically, but without limitation, reasonable attorneys' fees and
expenses of investigation) whether equitable or
-22-
legal, matured or contingent, known or unknown to the Sellers, foreseen or
unforeseen, ordinary or extraordinary, patent or latent, whether arising out of
occurrences prior to, at, or after the date of this Agreement, from (a) any
breach of, misrepresentation in, untruth in or inaccuracy in the representations
and warranties by the Companies, set forth in this Agreement or in the Schedules
attached to this Agreement or in the Collateral Documents; (b) nonfulfillment or
nonperformance of any agreement, covenant or condition on the part of the
Companies made in this Agreement or in the Collateral Documents and to be
performed by any of them before or after the Closing Date; and (c) any claim by
a third party that, if true, would mean that a condition for indemnification set
forth in subsections (a) or (b) of this Section 9.1 of this Agreement has
occurred. The indemnification in this Section 9.1 is subject to the limitations
set forth in Sections 9.5 and 9.6.
Section 9.2 Indemnification by Purchasers. The Purchasers agree that
-----------------------------
they will, jointly and severally, indemnify, defend, protect and hold harmless
USA Waste, and its respective officers, directors, divisions, subdivisions,
affiliates, subsidiaries, parents, heirs, legal representatives, successors and
assigns, as applicable, from and against all claims, damages, actions, suits,
proceedings, demands, assessments, adjustments, penalties, costs and expenses
whatsoever (including specifically, but without limitation, reasonable
attorneys' fees and expenses of investigation) whether equitable or legal,
matured or contingent, known or unknown to the Purchasers, foreseen or
unforeseen, ordinary or extraordinary, patent or latent, whether arising out of
occurrences prior to, at, or after the date of this Agreement, incurred by it,
or either of them, as a result of or incident to: (a) any breach of,
misrepresentation in, untruth in or inaccuracy in the representations and
warranties of Purchasers set forth in this Agreement or in the Collateral
Documents; (b) nonfulfillment of any agreement, covenant or condition on the
part of Purchasers made in this Agreement or in the Collateral Documents and to
be performed by Purchasers before or after the Closing Date; and (c) any claim
by a third party that, if true, would mean that a condition for indemnification
set forth in subsections (a) or (b) of this Section 9.2 has occurred. The
indemnification in this Section 9.2 is subject to the limitations set forth in
Sections 9.5 and 9.6.
Section 9.3 Procedure for Indemnification with Respect to Third Party
---------------------------------------------------------
Claims
------
(a) If any third party shall notify a party to this Agreement (the
"Indemnified Party") with respect to any matter (a "Third Party Claim") that may
give rise to a claim for indemnification against any other party to this
Agreement (the "Indemnifying Party") under this Article IX, then the Indemnified
Party shall promptly notify each Indemnifying Party thereof in writing;
provided, however, that no delay on the part of the Indemnified Party in
notifying any Indemnifying Party shall relieve the Indemnifying Party from any
obligation hereunder unless (and then solely to the extent) the Indemnifying
Party is thereby prejudiced. Such notice shall state the amount of the claim and
the relevant details thereof.
(b) Any Indemnifying Party will have the right to defend the Indemnified
Party against the Third Party Claim with counsel of its choice satisfactory to
the Indemnified Party so long as (i) the Indemnifying Party notifies the
Indemnified Party in writing within fifteen days after the
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Indemnified Party has given notice of the Third Party Claim that the
Indemnifying Party will indemnify the Indemnified Party pursuant to the
provisions of Article IX, as applicable, from and against the entirety of any
adverse consequences (which will include, without limitation, all losses,
claims, liens, and attorneys' fees and related expenses) the Indemnified Party
may suffer resulting from, arising out of, relating to, in the nature of, or
caused by the Third Party Claim, (ii) the Indemnifying Party provides the
Indemnified Party with evidence reasonably acceptable to the Indemnified Party
that the Indemnifying Party will have the financial resources to defend against
the Third Party Claim and fulfill its indemnification obligations hereunder,
(iii) the Third Party Claim involves only monetary damages and does not seek an
injunction or equitable relief, (iv) settlement of, or adverse judgment with
respect to the Third Party Claim is not, in the good faith judgment of the
Indemnified Party, likely to establish a precedential custom or practice adverse
to the continuing business interests of the Indemnified Party, and (v) the
Indemnifying Party conducts the defense of the Third Party Claim actively and
diligently.
(c) So long as the Indemnifying Party is conducting the defense of the
Third Party Claim in accordance with Section 9.3(b) above, (i) the Indemnified
Party may retain separate co-counsel at its sole cost and expense and
participate in (but not control) the defense of the Third Party Claim, (ii) the
Indemnified Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the prior written
consent of the Indemnifying Party (which will not be unreasonably withheld), and
(iii) the Indemnifying Party will not consent to the entry of any judgment or
enter into any settlement with respect to the Third Party Claim without the
prior written consent of the Indemnified Party (which will not be unreasonably
withheld). In the case of (c)(ii) or (c)(iii) above, any such consent to
judgment or settlement shall include, as an unconditional term thereof, the
release of the Indemnifying Party from all liability in connection therewith.
(d) If the conditions set forth in Section 9.3(b) above are or become
unsatisfied, (i) the Indemnified Party may defend against, and consent to the
entry of any judgment or enter into any settlement with respect to, the Third
Party Claim and any matter it may deem appropriate and the Indemnified Party
need not consult with, or obtain any consent from, any Indemnifying Party in
connection therewith, (ii) the Indemnifying Party will reimburse the Indemnified
Party promptly and periodically for the cost of defending against the Third
Party Claim (including attorneys' fees and expenses) and (iii) the Indemnifying
Party will remain responsible for any adverse consequences the Indemnified Party
may suffer resulting from, arising out of, relating to, in the nature of, or
caused by the Third Party Claim to the fullest extent provided in this Article
IX.
Section 9.4 Procedure for Non-Third Party Claims. If any Purchaser or
------------------------------------
USA Waste wishes to make a claim for indemnity under Section 9.1 or Section 9.2,
as applicable, and the claim does not arise out of a third party notification
which makes the provisions of Section 9.3 applicable, the party desiring
indemnification ("Indemnified Party") shall deliver to the parties from which
indemnification is sought ("Indemnifying Party") a written demand for
indemnification ("Indemnification Demand"). The Indemnification Demand shall
state: (a) the amount of losses, damages or expenses to which the Indemnified
Party has incurred or has suffered or is expected
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to incur or suffer to which the Indemnified Party is entitled to indemnification
pursuant to Section 9.1 or Section 9.2, as applicable; (b) the nature of the
event or occurrence which entitles the Indemnified Party to receive payment
under Section 9.1 or Section 9.2, as applicable. If the Indemnifying Party
wishes to object to an Indemnification Demand, the Indemnifying Party must send
written notice to the Indemnified Party stating the objections and the grounds
for the objections ("Indemnification Objection"). If no Indemnification
Objection is sent within forty-five (45) days after the Indemnification Demand
is sent, the Indemnifying Party shall be deemed to have acknowledged the
correctness of the claim or claims specified in the Indemnification Demand and
shall pay the full amount claimed in the Indemnification Demand within sixty
(60) days of the day the Indemnification Demand is dated. If for any reason the
Indemnifying Party does not pay the amounts claimed in the Indemnification
Demand, within thirty days of the Indemnification Demand's date, the Indemnified
Party may institute legal proceedings to enforce payment of the indemnification
claim contained in the Indemnification Demand and any other claim for
indemnification that the Indemnified Party may have.
Section 9.5 Survival of Claims.
------------------
(a) [Intentionally deleted].
(b) Unless otherwise set forth in this Agreement, the respective
representations, warranties, covenants and obligations of the Sellers and
Purchasers set forth in this Agreement shall survive consummation of the
transactions contemplated by this Agreement for eighteen months (18) after the
Closing Date, except for representations and warranties relating to taxes, which
shall survive until the expiration of the applicable statue of limitations.
(c) Notwithstanding the provisions of Section 9.5(b) above, which provides
that representations, warranties and obligations expire after certain stated
periods of time, if within the stated period of time, an Indemnification Demand
is given, or a suit or action based upon representation or warranty is
commenced, the Indemnified Party shall not be precluded from pursuing such claim
or action, or from recovering from the Indemnifying Party (whether through the
courts or otherwise) on the claim or action, by reason of the expiration of the
representation or warranty.
Section 9.6 Limitation of Liability. Notwithstanding anything else to
-----------------------
the contrary contained herein, (a) the obligations of USA Waste pursuant to the
indemnifications contained in Section 9.1 and Section 9.2 shall be limited to
the amount that is equal to (x) Four Million Eight Hundred Thousand Dollars
($4,800,000) minus (y) amounts paid by USA Waste pursuant to the indemnification
provision of that certain Agreement for the Sale and Purchase of the Stock of
Soil Remediation of Philadelphia, Inc., between Purchaser and Seller and dated
as of August 20, 1997 and (b) the obligations of Purchaser pursuant to the
indemnifications contained in Section 9.1 and Section 9.2 shall be limited to
the amount that is equal to (x) Four Million Eight Hundred Thousand Dollars
($4,800,000) minus (y) amounts paid by Purchaser pursuant to the
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indemnification provision of that certain Agreement for the Sale and Purchase of
the Stock of Soil Remediation of Philadelphia, Inc., between Purchaser and
Seller and dated as of August 20, 1997.
ARTICLE X
OTHER PROVISIONS
----------------
Section 10.1 Nondisclosure by USA Waste. USA Waste recognize and
--------------------------
acknowledge that they have in the past, currently have, and in the future will
have certain confidential information of the Soil Remediation Business such as
lists of customers, operational policies, and pricing and cost policies that are
valuable, special and unique assets of the Soil Remediation Business. USA Waste
agrees that for a period of five (5) years from the Closing Date it will not
disclose such confidential information to any person, firm, corporation,
association or other entity for any purpose or reason whatsoever, except to
authorized representatives of Purchasers, unless (i) such information becomes
known to the public generally through no fault of USA Waste, (ii) USA Waste is
required to disclose such information by a governmental entity or pursuant to a
court proceeding, or (iii) the Closing does not take place. In the event of a
breach or threatened breach by USA Waste of the provisions of this Section,
Purchasers shall be entitled to an injunction restraining USA Waste from
disclosing, in whole or in part, such confidential information. Nothing herein
shall be construed as prohibiting Purchasers from pursuing any other available
remedy for such breach or threatened breach, including, without limitation, the
recovery of damages.
Section 10.2 Nondisclosure by Purchasers. Purchasers recognize and
---------------------------
acknowledge that they have in the past, currently have, and prior to the Closing
Date, will have access to certain confidential information of the Soil
Remediation Business, such as lists of customers, operational policies, and
pricing and cost policies that are valuable, special and unique assets of the
Soil Remediation Business. Purchasers agree that they will not utilize such
information in the business or operation of Purchasers or any of their
affiliates or disclose such confidential information to any person, firm,
corporation, association, or other entity for any purpose or reason whatsoever,
unless (i) such information becomes known to the public generally through no
fault of Purchasers or any of its affiliates, (ii) Purchasers are required to
disclose such information by a governmental entity or pursuant to a court
proceeding, or (iii) Closing takes place. In the event of a breach or threatened
breach by Purchasers of the provisions of this Section, USA Waste shall be
entitled to an injunction restraining Purchasers from utilizing or disclosing,
in whole or in part, such confidential information. Nothing contained herein
shall be construed as prohibiting USA Waste from pursuing any other available
remedy for such breach or threatened breach, including, without limitation, the
recovery of damages.
Section 10.3 Assignment; Binding Effect; Amendment. This Agreement and
-------------------------------------
the rights of the parties hereunder may not be assigned (except by operation of
law) and shall be binding upon and shall inure to the benefit of the parties
hereto, and their respective successors, personal representatives and assigns.
This Agreement, upon execution and delivery, constitutes a valid and
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binding agreement of the parties hereto enforceable in accordance with its terms
and may be modified or amended only by a written instrument executed by all
parties hereto.
Section 10.4 Entire Agreement. This Agreement, is the final, complete
----------------
and exclusive statement and expression of the agreement among the parties hereto
with relation to the subject matter of this Agreement, it being understood that
there are no oral representations, understandings or agreements covering the
same subject matter as the Agreement. The Agreement supersedes, and cannot be
varied, contradicted or supplemented by evidence of any prior to contemporaneous
discussions, correspondence, or oral or written agreements of any kind. The
parties to this Agreement have relied on their own advisors for all legal,
accounting, tax or other advice whatsoever with respect to the Agreement and the
transactions contemplated hereby.
Section 10.5 Counterparts. This Agreement may be executed simultaneously
------------
in two or more counterparts, each of which shall be deemed an original and all
of which together shall constitute but one and the same instrument.
Section 10.6 Notices. All notices or other communications required or
-------
permitted hereunder shall be in writing and may be given by depositing the same
in United States mail, addressed to the party to be notified, postage prepaid
and registered or certified with return receipt requested, by overnight courier
or by delivering the same in person to such party.
(a) If to Purchasers, addressed to them at:
President
Eastern Environmental Services, Inc.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxx Xxxxxx 00000
with a copy to:
Xxxxxx X. Xxxxxx & Associates, P.C.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxx xx Xxxxxxx, Xxxxxxxxxxxx 00000
(b) If to USA Waste, addressed to them at:
Office of General Counsel
USA Waste Services, Inc.
First City Tower
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
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Notice shall be deemed given and effective the day personally delivered, the day
after being sent by overnight courier and three business days after the deposit
in the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when actually received, if earlier. Any
party may change the address for notice by notifying the other parties of such
change in accordance with this Section 10.6.
Section 10.7 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the internal laws of the Commonwealth of
Pennsylvania, without giving effect to any choice or conflict of law provision
or rule (whether of the Commonwealth of Pennsylvania or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
Commonwealth of Pennsylvania.
Section 10.8 No Waiver. No delay of or omission in the exercise of any
---------
right, power or remedy accruing to any party as a result of any breach or
default by any other party under this Agreement shall impair any such right,
power or remedy, nor shall it be construed as a waiver of or acquiescence in any
such breach or default, or of or in any similar breach or default occurring
later; nor shall any waiver of any single breach or default be deemed a waiver
of any other breach of default occurring before or after that waiver.
Section 10.9 Time of the Essence. Time is of the essence of this
-------------------
Agreement as well as all dates referred to herein and extensions thereof.
Section 10.10 Captions. The headings of this Agreement are inserted for
--------
convenience only, shall not constitute a part of this Agreement or be used to
construe or interpret any provision hereof.
Section 10.11 Severability. In case any provision of this Agreement shall
------------
be invalid, illegal or unenforceable, it shall, to the extent possible, be
modified in such manner as to be valid, legal and enforceable but so as most
nearly to retain the intent of the parties. If such modification is not
possible, such provision shall be severed from this Agreement. In either case
the validity, legality and enforceability of the remaining provisions of this
Agreement shall not in any way be affected or impaired thereby.
Section 10.12 Construction. The parties have participated jointly in the
------------
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties and no presumption or burden of proof shall
arise favoring or disfavoring any party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local or
foreign statute shall be deemed to refer to all rules and regulations
promulgated thereunder, unless the context requires otherwise. The word
"Including" means included, without limitation.
Section 10.13 Extension or Waiver of Performance. Either USA Waste or
-----------------------------------
Purchaser may extend the time for or waive the performance of any of the
obligations of the other, waive any
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inaccuracies in the representations or warranties by the other, or waive
compliance by the other with any of the covenants or conditions contained in
this Agreement, provided that any such extension or waiver shall be in writing
and signed by the USA Waste and the Purchaser.
Section 10.14 Liabilities of Third Parties. Nothing in this Agreement,
----------------------------
whether expressed or implied, is intended to confer any rights or remedies under
or by reason of this Agreement on any persons other than the parties to it and
their respective successors, legal representative and assigns, nor is anything
in this Agreement intended to relieve or discharge the obligation or liability
of any third persons to any party to this Agreement, nor shall any provisions
give any third person any rights of subrogation or action over or against any
party to this Agreement.
Section 10.15 Disclosure on Schedules. The parties to this Agreement
-----------------------
shall have the obligation to supplement or amend the Schedules being delivered
concurrently with the execution of this Agreement and annexed hereto with
respect to any matter hereafter arising or discovered which, if existing or
known at the date of this Agreement, would have been required to be set forth or
described in the Schedules. The obligations of the parties to amend or
supplement the Schedules shall terminate on the Closing Date. Notwithstanding
any such amendment or supplementation, the condition to Closing set forth in
Section 7.1 shall not be satisfied, if the amendment or supplementation of any
Schedule by USA Waste results in any of USA Waste's representations and
warranties changing in a manner which the Purchaser in good faith believes is
materially adverse to the Purchaser.
Section 10.16 Agreement Not Binding Until Fully Executed. This Agreement
------------------------------------------
shall not be binding on any party hereto until the Agreement has been fully
executed.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties,
as of the date first above written.
USA WASTE SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Its: Vice President
EASTERN ENVIRONMENTAL SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Its: Executive Vice President
EASTERN OF FAIRLESS HILLS, INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Its: Executive Vice President
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